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Michael Noonan Edge Trader Plus Michael Noonan is the driving force behind Edge Trader Plus. He has been in the futures business for 30 years, functioning primarily in an individual capacity. He was the research analyst for the largest investment banker in the South, at one time, and he... More
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  • S & P - Retest Still In Progress. That Is The Message. 0 comments
    Jun 1, 2010 11:27 PM

    Tuesday Evening  1 June 2010

     The Trend.  The Message of the Market.  Opportunity.  This pretty much
    covers the importance of what leads to consistent trading results.  We have
    been reluctant to go short simply because of what appears to be buying at
    these lower levels.  On 24 May, we expected at least a retest of the
    February low, [Article, S & P - The Market Is Showing Its Hand, to view, click
    on http://bit.ly/9PpjCm]  In addition, resistance was identified starting at 1089 up through 1123, [3rd paragraph].

      After a week ago Tuesday's retest of February's low, we characterized
    buying at the low, and more buying on the following Thursday retest of
    Tuesday, [see S & P - Heed The Market's Message,  to view, click on
    http://bit.ly/bi4LtH, the first paragraph referenced the Tuesday low, and 
    the second paragraph discussed a change in volume behavior].

      It is for all of these reasons we have chosen not to go short, yet.  The
    market is in a retest of the lows mode, and there is no way of knowing
    whether the previous Thursday low will hold, the lows from the 26th, or
    perhaps tonight's slightly lower low going into Wednesday's day session. 
    Plus, the last month's decline has fulfilled the downside targets, so that
    energy has been exhausted, for now.

     Frankly, we are looking for a low risk buying opportunity.  We continue to
    watch results, not just price,and the S&P is making higher lows, still, and
    that indicates the potential rally to which we allude, with a target between
    1106 to 1123.   There have been intra day rallies, but none have held as
    they lead to weakness by the end of the trading day.  All this is telling us
    is that the retesting process is not yet complete.

     So we wait.

     What for?

     Evidence that the sell-offs have ended, coupled with a sign of a turnaround, starting on an hourly chart that may also turn the daily trend to point up, at
    least for a spell.  The overall, broader trend points to eventual lower prices.


    S&P D 1 Jun 10

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